Company Managers: Elliot Miller

Elliot Miller: Thats because MLPs pay investors almost all the money they bring in, and sometimes even more. And the more they pay out, the more company managers can charge in fees. Some of them take a cut of as much as 50 percent -- hefty enough that investors complain the money is diverted from maintenance on the pipelines and storage tanks the partnerships own, according to Business Week. Its managements job to maximize the return and not to siphon money off the top, said Elliot Miller, a 79-year-old retired tax attorney in Naples, Florida, who owns more than $9 million in MLP shares. I just dont like that they do it and Most businesses focus on profits. The energy infrastructure companies known as master limited partnerships are all about cash. Pegging fees to investor payouts creates incentives for managers to boost dividends, usually called distributions, by issuing debt and selling more shares rather than spending to improve the company, a cycle that can be tough to sustain, according to critics including Stuart Miller, an analyst at Moodys Investors Service Inc. Higher fees can mean thinner cushions of cash in case revenue falls, making the MLPs a riskier investment for retirees who are buying into the stocks more than ever as low interest rates make it difficult to find income. (news.financializer.com). As reported in the news.